Risks of flood-related foreclosures rising
Through myopic indifference, society is making adaptation to sea-level rise exponentially riskier than it needs to be.
There is a noticeable absence of meaningful federal and state legislation to create practical and innovative financial tools necessary to help ordinary people and small businesses cope with the projected harm of rising waters. Each day that passes, reluctant lawmakers are unnecessarily escalating the destabilizing physical and emotional effects of swelling oceans with an unprepared and risky fiscal future.
The present course of neglect increases social climate change vulnerability on a wide scale. As Southeast Florida struggles with its uncertain future due to rising salt water, its plight is an early alarm to address microeconomic imperatives for the rest of America’s vulnerable coastal regions.
Sea-level rise is a national economic insecurity. According to the National Ocean Service, 39 percent of the U.S. population in 2010 lived in counties that are on shorelines. As discussions about relocation from vulnerable coastlines are surfacing, the use of federal grants to relocate populations affected by chronic flooding will not be realistic.
The victims of this careless disregard of climate change planning are homeowners, renters, entrepreneurs, corporate entities and just plain ordinary people of all demographics and incomes. They have no meaningful assistance in the federal or state tax statutes and regulations, as “casualty loss” under the tax law does not apply to slow but persistent intruding oceans.
Preparedness for climate challenges means understanding the challenges of the paycheck-to-paycheck worker, the single mother, those displaced by gentrification, the elderly, the disabled and the rest of the “99 percent” so they will be ready for the flooding that will damage coastal areas in the years leading up to 2040 and beyond.
The moral imperative of providing people with financial mechanisms to save, plan and be prepared, heightens as the oceans escalate. To be sure, the duty to ready our economy for environmental change is not limited to governments, but also to financial institutions, educational interests and individuals.
The risk of flooding-related mortgage foreclosures is rising in coastal regions with fragile housing markets, yet it is inevitable homeowners in many areas will need to choose between paying their contractual obligations versus saving to move to higher ground. The financial industry, from Wall Street to Main Street, needs to consider the day when creative mortgage modifications are necessary because the sea is rising.
It is shocking that despite years of warning about losing ground across America’s coastlines, there is no law or financial remedy that is in place for people to start saving tax-free today to cope with the rising water in the decades ahead.
Institutional lenders and credit agencies are not ready for the consumer and financial implications of intruding salt waters. When adaptation to climate change forces planned migration, credit histories will be in peril because we ignored the need to carve out environmental exceptions to the way we rate credit risks.
Federal and state lending, investing and financial disclosure laws need to be evaluated with the climate in mind. People need to know the true risk of borrowing when measured against peer-reviewed scientific projections of water intrusion and extreme weather.
Realtors, property owners and lenders need modern truth-in-lending rules to protect their industries and consumers. But that is not all.
Insuring affordable housing as some regions retreat is a national imperative.
MITCHELL CHESTER, MIAMI Editor’s note: Chester is CEO of Climate Monitor Media Inc., which broadcasts Climate Monitor, a streaming TV channel devoted solely to climate change and sea level rise issues.